Currently, creditors cannot attach qualified plan
assets, such as 401(k) account balances, while they remain
in the plan. Some versions of the bankruptcy reform
bills introduced over the past couple of years would have
subjected these balances to that risk in the event of
participant bankruptcy, subject to certain dollar
limits.

The reintroduced bills do contain a provision that would
allow creditors to reach IRA assets in excess of $1
million, but excludes amounts attributed to rollovers from
employer plans – effectively making the exception moot,
James Delaplane, Vice President, Retirement Policy for the
Council told PLANSPONSOR.com.

The legislation is expected to be considered on an
expedited schedule and should easily pass both the House
and Senate. President Bush has already indicated that he
will sign the measure.